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Though the U.S. benchmarks’ bigger-picture backdrop is not one-size-fits-all, the May downturn has inflicted its first material damage this week.

Against this backdrop, the S&P 500 has violated its 50-day moving average — closing lower for the first time since January — while still thus far narrowly maintaining major support (2,817).

Before detailing the U.S. markets’ wider view, the S&P 500’s /zigman2/quotes/210599714/realtimeSPX+2.62%
hourly chart highlights the past two weeks.

As illustrated, the S&P has extended its May downturn, reaching likely last-ditch support.

Recall that the 2,800-to-2,817 area defined the former range top, and marks the breakout point from the S&P’s massive V-shaped reversal. Tuesday’s early upturn punctuates a shaky, but thus far successful, retest.

In fact, the Dow has ventured under its 200-day moving average, currently 25,422, notching its first close lower since January.

Delving deeper, the Dow has thus far maintained the March low (25,208) an area better illustrated on the daily chart.

Against this backdrop, the Nasdaq Composite has placed distance under its 50-day moving average.

In the process, the index has tagged significant support (7,670), the former range top, also illustrated below.

Widening the view to six months adds perspective.

On this wider view, the Nasdaq has violated its breakout point (7,850) an area closely matching the 50-day moving average, currently 7,848. The downturn raises an intermediate--term caution flag, though a swift reversal atop the 7,850 area would neutralize the May downdraft.

More immediately, the index has reached significant support matching the mid-October peak (7,670), also the former range top. Tuesday’s early upturn punctuates a shaky but successful initial retest.

Looking elsewhere, the Dow Jones Industrial Average remains the weakest major U.S. benchmark.

As illustrated, the index has violated its breakout point, circa 25,950, plunging straight through a less-charted patch.

To reiterate, Monday’s close (25,325) registered under the 200-day moving average, currently 25,422, though the Dow has maintained support matching the March low (25,208).

Tactically, an eventual close atop the breakdown point (25,950) would neutralize the May downdraft. The pending retest from underneath should be a useful bull-bear gauge.

Meanwhile, the S&P 500 has violated its 50-day moving average, closing lower for the first time since January.

The downturn has thus far been underpinned by major support, the 2,800-to-2,817 area. The May low (2,801), established Monday, has punctuated a successful initial retest.

Tactically, near-term resistance matches the early-April gap — at 2,836 and 2,848 — and is followed by the 50-day moving average, currently 2,863.

The bigger picture

Collectively, the U.S. benchmarks have diverged slightly, and the bigger-picture backdrop is not one-size-fits-all.

But on a headline basis, the persistent May downturn has inflicted its first material technical damage this week. The S&P 500 and Nasdaq Composite have concurrently sold off to major support — placing distance under the 50-day moving average — while the Dow Jones Industrial Average has notched its first close under the marquee 200-day moving average since January.

Moving to the small-caps, the iShares Russell 2000 ETF has violated major support.

The specific area matches the 200-day moving average (155.23) and 50-day moving average (155.45).

Tactically, the downturn wrecks the May breakout attempt. The 155.50 area pivots to resistance, and a swift reversal higher would place market bulls back on offense.

As illustrated, the mid-cap benchmark has placed distance under its 50-day moving average, also closing under the 200-day moving average (345.20) for the first time since March. An extended retest of the 200-day remains underway early Tuesday.

Looking elsewhere, the SPDR Trust S&P 500 has pulled in from record territory amid a sustained May volume increase.

Recall that major support matches the former range top, broadly spanning from about 280.40 to 281.60. Tuesday’s early upturn punctuates a successful retest.

Conversely, overhead inflection points match the early-April gap — at 282.84 and 284.40 — the session defining the SPY’s runaway gap to start the second quarter.

Placing a finer point on the S&P 500, its
near-term
bias turned bearish last week, with the violation of the breakout point (2,898).

The nearly immediate failed retest from underneath has been punctuated by aggressive downside follow-through. Consider that Monday’s market breadth registered bearish extremes, including a 10-to-1 down day on the NYSE. (A “down day” means that declining volume surpassed advancing volume by the stated margin.)

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